What is Forex?
Forex is a foreign currency trading market. with the highest turnover in the world This market has an average daily turnover of $6.6 million. (According to the Federal Reserve Bank for International Settlements), the figure represents a much higher valuation than the US stock market.
The highest exchanged currency is US Dollar, followed by Euro.
The Forex market is now often considered speculative. Many individual investors are interested in this market. Because it has key strengths that are different from other markets, including:
- High liquidity, execution of orders is as fast as a second.
- It is a market that can be traded 24 hours a day (Monday – Friday).
- Ability to access leverage tools
- relatively low fees from the high competition between brokers
market risk Forex
This issue requires great attention. This is because Forex is generally considered to be a market that
It is “extremely risky” because of the volatility of the price and the use of leverage that can pose a higher risk than conventional investments.
- price volatility risk
The price fluctuations in the Forex market are highly sensitive. and fluctuate according to economic numbers For example:
- Economic growth (US GDP figures)
- Federal Reserve Interest Rate Modifications
- Confidence in US Dollar, Euro
- inflation concerns
- US Consumer Price Index, CPI
- and other factors affecting economic confidence
- Risk of using Leverage
This market has leverage tools involved, thus resulting in the ability to overtrading.
higher than the general market
*For example using 1:100 leverage
means buying assets on this market Can be bought at a value that is a hundred times higher than the capital in the portfolio.
This high leverage can pose a risk that is difficult to control. and can result in losses that are many times higher than normal In short, the risk-taking ability on the Forex market is many times higher than that of the general market.
trading How does Forex work?
Forex trading is now possible through foreign brokers. because in Thailand
Forex brokers are not allowed to be established in the Kingdom, please note that trading with offshore brokers will not be covered by domestic authorities
*Factors to consider when choosing an offshore broker are: “Registration and License”
Good and high standard brokers Must be properly registered and should be under the supervision of leading agencies For example:
- ASIC (Australian Securities and Investments Commission)
Securities and Investments Commission (SEC, Australia)
- FCA (Financial Conduct Authority, United Kingdom)
financial regulator of the United Kingdom
Additional information: Forex broker registration schedule
because these agencies are strict in the audit of the financial statements and checking the broker’s operating standards It is also an intermediary in receiving complaints from investors.
This can help prevent potential fraud issues.
and another very important thing to enter this market is “Basic knowledge required”
especially portfolio management skills These are fundamentally important, including:
- Understanding Order Forms (Limit, Stop)
- Risk Management
- Technical Analysis
- Fundamental Analysis
- System management and trading statistics (System & Back-Testing)
- Psychology and the ability to manage portfolios (Mindset Control)
Gold in the Forex market
Trading gold on the Forex market is another asset class with a high market share.
Average daily turnover is up to $130 billion. (According to the Central Bank for International Settlements), which is several times higher than the gold futures market.
Because there is volume trading from around the world. and is not limited to only the country
Known as the Gold Spot, this market is an international market for trading gold in the form of contracts. It is traded 24 hours a day (Monday-Friday) in US dollars per ounce. and use the symbol as XAUUSD
Gold Spot is often considered an alternative asset class. used for risk diversification or Asset Allocation Portfolio Management, but what must be considered is the risk in this market. Because the price changes are highly volatile. and sensitive to economic numbers They also have access to leverage tools.
Therefore, the ability to pose a risk Therefore, it is many times higher than trading gold on the general market.
Learn more: XAUUSD Gold Trend Analysis
Market Summary Forex
Forex is still the most heavily traded market in the world today. and has continued to grow
The key strengths that make this market interesting are Ability to access leverage tools
and high liquidity As a result, the retailers are more interested in this market.
The issue that needs to be emphasized is “risk” because of the price changes in this market.
sensitive and has a very high level of volatility Price changes up to the level of a thousand points.
It can happen in a matter of minutes. which is sensitive to the announcement of economic numbers
In addition, access to leverage tools that can pose a risk that is many times higher than the general market.
*If interested in learning more regarding the Forex market, please visit the website. Forexnew.org
